UK luxury retailer Burberry stops production in China on concerns over worker’s conditions

The British owned luxury goods manufacturer Burberry has pulled production of its bags from a factory in the Guangdong Province of China, the Bureau has learnt.

The move follows concerns that working hours and conditions at the factory, operated by the Korean company Simone Accessories Collection, were in possible violation of Burberry’s ethical guidelines.

Burberry told the Bureau it has pulled out of the factory for a variety of reasons.

The China-based factory makes handbags for several western clothing and accessory brands. As well as Burberry, clients include Michael Kors and Coach.

The Chinese factory has been the centre of worker grievances in the past. In June 2011 workers staged a four-day strike protest. They complained about low pay and aggressive and verbally abusive behaviour by the factory’s new Korean management.

During the strike large numbers of police arrived to maintain order, and some strikers were arrested. Factory workers also claimed some people involved in the strike were dismissed from their jobs, though the Bureau was unable to substantiate these claims.

In June 2010, Burberry joined the ‘Ethical Trading Initiative’ and the company has incorporated the ETI Code into its own Ethical Trading Code of Conduct.

One section of the code states that ‘workers shall not on a regular basis be required to work in excess of 48 hours per week and shall be provided with at least one day off for every 7 day period on average.’

The Bureau, however, understands that workers at the Simone factory have been working up to 11 hours a day on a six-day working week.

The iconic brand confirmed this, telling the Bureau that ‘Burberry had been made aware of work hours exceeding 60 hours per week’. The company said it had advised Simone that it considered this to be non-compliance with its code of conduct.

Last year workers also complained that whilst the salary paid by the factory was above the minimum wage, the minimum wage itself does not constitute a ‘living wage’ as it has not been increased in line with China’s inflation. Workers also had complaints about the quality of food provided in the canteen.

Prior to pulling out of the Chinese factory, where Burberry accounted for about 3% of output, Pamela Batty, Director of Corporate Responsibility stated ‘we do recognise that more needs to be done and we thank the Bureau of Investigative Journalism for bringing these issues to our attention’.

The company received its last consignment of Simone-made products in July.

Last week Burberry was in the headlines after warning its profits would be at the bottom end of expectations. Growth was down in all three of its top markets. Despite this, Burberry still looks likely to improve on last year’s £376m profits.

The group was the subject of criticism when in 2007 it closed a factory in Treorchy in South Wales as part of a shift in manufacturing to China.

Luxury goods manufacturers Coach was unavailable for comment.

Michael Kors maintained it had a rigorous Code of Conduct policy in place and stated: ‘Our company policy is not to discuss individual vendor relationships. With all of our vendors we work in a constructive and diligent way to resolve all compliance issues.’

The company that runs the factory, Simone, did not respond to the Bureau’s repeated requests for comment.

Written by  for the Bureau of Investigative Journalism.